13 Coal Miners Agree to Change Contracts

The government and 13 coal mining companies have agreed to change the old Contract of Work (CoW), as part of the implementation of Law No. 4/20199 on mineral and coal mining.

“Energy and Mineral Resources Minister Ignasius Jonan signed amendments of 13 contracts on Tuesday,” the Energy and Mineral Resources Ministry's mineral and coal director general Bambang Gatot Ariyono said as reported by kontan.co.

Among the coal miners that have agreed to change the contracts are PT Arutmin Indonesia, PT Kaltim Prima Coal, PT Berau Coal, PT Kideco Jaya Agung and a subsidiary of Adaro Group.

Bambang said the amendment aimed to scrap some articles in the old contracts, which were not in line with the law, and to add new articles.

Under the new contracts, the government will get additional revenue, among other things, from the increase in land mining fees from US$1 per hectare to $4 per hectare of land, and the companies are also required to pay in cash 13.5 percent of the Coal Production Fund, which was previously paid in coal.

“With the amendments, government revenue from the 13 companies is expected to increase by $68 million annually,” he added.

After the amendment, the companies are required to submit their working plans for their mining site during the period of their contracts.